Malik Law Chambers (Solicitors), R (on the application of) v Legal Complaints Service (The Law Society)

A solicitor’s lawful lien over client documents may nevertheless be unreasonable for the purposes of the statutory complaints regime. The Legal Complaints Service may therefore direct delivery up where retention amounts to inadequate professional service. An adjudicator must identify when retention became unreasonable and explain why, particularly where compensation is ordered for consequential loss. Reasons need not be lengthy, but they must enable the parties to understand the basis of the decision. Where the reasons do not identify the relevant factual findings, timing, or causal basis for the order, the decision may be quashed for inadequate reasons. The reviewing court need not decide whether the decision was irrational if the reasons are insufficient to permit that assessment.

The claimant solicitor challenged an adjudicator’s decision made for the Legal Complaints Service. The adjudicator found that the claimant had provided inadequate professional services by retaining passports and other documents under a lien for unpaid costs. She directed delivery of the documents, compensation of £7,538.92, and payment of £840 in costs.

The claimant argued that the adjudicator lacked power to treat exercise of a lawful lien as unreasonable or to direct delivery up, and that the decision lacked adequate reasons and was Wednesbury unreasonable. The central issues were the scope of the statutory powers and whether the adjudicator sufficiently explained why retention was unreasonable and when that became so.

1. Statutory power. The fact that a solicitor has a legal right to exercise a lien does not prevent its exercise from being unreasonable in particular circumstances. The statutory complaints regime requires professional services to be of a quality reasonably expected of a solicitor. The Legal Complaints Service may regulate cases in which a lien is unreasonably exercised.
2. Power to direct delivery up. The direction to return documents fell within paragraph 2(1)(d) of Schedule 1A to the Solicitors Act 1974, which permitted directions requiring a solicitor to take other action in the client’s interests. The adjudicator therefore had power, if the facts justified it, to order delivery of documents subject to a lien.
3. Adequacy of reasons. The standard of reasonableness was primarily for the adjudicator, subject to adequate reasons and the ordinary public law control against Wednesbury unreasonableness. Reasons need not be lengthy, but they must explain why the decision was reached. The adjudicator had not identified whether the claimant knew from the outset that retention would prevent the interested party claiming benefits, whether there was loss when the documents were first retained, or whether the earlier caseworker’s conclusion affected the reasonableness of continued retention.
4. The adjudicator also failed to identify when retention became unreasonable and what event or circumstance caused that change. Without those findings, the claimant could not understand why delivery was required or why the whole loss of benefits was attributable to the retention. The proper basis for challenge was inadequate reasons; the court declined to determine irrationality without adequate reasons enabling that question to be assessed.
5. The adjudicator’s decision was quashed. The court considered that the defects could not realistically be cured by a further statement from the adjudicator.

First-instance judicial review proceedings. The decision of the adjudicator was quashed.